By Jen Kinney.
Building more market-rate housing in the Bay Area may reduce displacement pressure at the regional level, but building subsidized housing has over twice the impact, according toresearchers at UC Berkeley’s Urban Displacement Project. In a report released this week, they note that at the level of San Francisco blocks, neither market-rate nor subsidized housing production has a significant impact on displacement though, likely due to “the extreme mismatch between supply and demand.”
Miriam Zuk and Karen Chapple wrote the new report in response to one from California’s Legislative Analyst’s Office (LAO), which in February drew from the Urban Displacement Project’s public data to argue that market-rate development is the most effective way to prevent the displacementof low-income residents. The LAO report suggested that areas with high rates of market-rate construction saw less displacement, regardless of whether those communities had inclusionary zoning policies mandating new construction include some affordable units. Rather, argued the LAO, even luxury apartments “filter” through the housing market, becoming more affordable over time. In other words: All housing development can be good housing development.
Zuk and Chapple take issue with that interpretation. In “Housing Production, Filtering and Displacement: Untangling the Relationships,” they say that filtering is not a dependable displacement intervention. While the production of market-rate housing did result in lower rents in later decades, they found that units filtered down to low-income households more quickly than rents decreased, so even if they were available to low-income renters, they represented a higher housing cost burden. The authors also cite other research that found places with rapidly rising housing prices to have slower filtering rates. In the Bay Area, they estimate, the filtering rate is approximately 1.5 percent per year. At that pace, if most developers are building for people at the area median income (AMI), it would take about 15 years for those units to filter down to people at 80 percent AMI, and closer to 50 years for households at 50 percent AMI.
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